Dud SAA sale was ‘inevitable’

The failure of the secret SAA-Takatso deal was inevitable given that it was a bad deal from the beginning.

That is according to Democratic Alliance MP Alf Lees following Public Enterprises Minister Pravin Gordhan’s announcement yesterday of the scrapping of the sale of 51% of South African Airways’ (SAA) shares to the Takatso consortium.

“The taxpayer took on all SAA’s massive liabilities of some R15 billion, leaving SAA debt-free with considerable assets, including a respected brand, all of which had a likely value that exceeded R7 billion,” Lees said. “For 51% of this debtfree SAA to be sold for R51 was outrageous and a slap in the face of taxpayers,” Lees said.

Currently, SAA is running at massive losses that amounted to R760 million in the first three quarters of the last financial year.

“This incompetent SAA management will now result in these losses leading to yet more taxpayer bailouts,” Lees said. “There is no strategic need for a state-run airline that diverts limited state funding away from the desperate need to stimulate economic growth. SAA must be cut loose and be sold.

“The airline industry has recovered and a willing private buyer should be easily found.”

The 2021 deal had been controversial, with Gordhan previously saying some documents relating to it had to be kept secret due to the negotiations and the documents’ commercial sensitivity.

The documents were:

The shortlist of interested parties from which Takatso was selected;

The Harith General Partners’ expression of interest (Harith is the funding partner in Takatso); and

The sale-of-shares agreement and addenda.

Gordhan said if SAA was liquidated, 4 700-odd staff would lose their jobs, all of the assets of SAA would be sold in a fire sale, and “workers at SAA would go home with R30 000 each, notwithstanding many of them have served SAA for 20-odd years”.

The announcement comes days after Gordhan announced his retirement.